PA Business Laws


PA Business Laws

Act 170 of 2016 (“Act” or “Act 170”), which became effective on February 21, 2017, brought sweeping changes to the treatment of certain Pennsylvania business entities, including limited liability companies; limited partnerships; limited liability partnerships; limited liability limited partnerships; and general partnerships.  The Act also modifies portions of the law relating to nonprofit organizations.

Act 170 becomes effective in two phases: first, for business entities formed before February 21, 2017, the law becomes effective on April 1, 2017, unless the existing entity elects to be governed by the Act before April 1; and, second, for those entities formed on or after February 21, 2017, the law is effective upon formation.

The statutory changes encompassed in Act 170 are long overdue.  These changes not only will provide business entities with more flexibility in structuring and reorganizing their companies, but also will lower costs related to such transaction while promoting business growth in Pennsylvania.

Some important changes imposed by Act 170 include:

  • allowing a business entity’s governing document to vary the duties of the entity’s managers, members and partners;
  • clarifying the status of transferees of members or partners and limiting the remedies of creditors against limited partners and members;
  • clarifying the rights of members to company information;
  • providing for the implementation of “tests” to measure the legality of interim and liquidating distributions;
  • defining “governance interests” and “transferable interests”, and setting forth the manners in which such interests can be transferred to third parties who are not members or partners of the entity;
  • permitting business entities to engage in fundamental transactions (i.e., mergers, conversions, interest exchanges, divisions, domestications, etc.) in a uniform structure with any other type of business entity; and
  • providing for the formation of nonprofit limited liability companies and partnerships.

For questions relating to Act 170, and to discuss how the Act affects your business, contact C.J. Zwick, partner of Zwick Law, at (814) 371-6400 or, to schedule a legal consultation.  At Zwick Law, we’re always here for you!